Volvo 2014 Annual Report Download - page 102

The Board’s committees
5 Audit Committee
Duties
In December 2002, the Board established an Audit Committee primarily
for the purpose of overseeing the accounting and fi nancial reporting pro-
cesses and the audit of the fi nancial statements.
The Audit Committee is responsible for preparing the Board’s work to
assure the quality of the Group’s fi nancial reporting by reviewing the
interim reports, the Annual Report and the consolidated accounting. The
Audit Committee also has the task of reviewing and overseeing the
Group’s legal and taxation matters as well as compliance with laws and
regulations that may have a material impact on the fi nancial reporting.
Further the Audit Committee has the task of reviewing and overseeing the
impartiality and independence of the company’s auditors. The Audit Com-
mittee is responsible for evaluating the internal and external auditors’
work, providing the Election Committee with the results of the evaluation
of the external auditors and to assist in preparing proposals for the elec-
tion of auditors. In addition, it is the Audit Committee’s task to establish
guidelines specifying what other services, beyond auditing, the company
may procure from the auditors. The Audit Committee shall also evaluate
the quality, relevance and effi ciency of the Group’s system for internal
control over fi nancial reporting, and with respect to the internal audit and
risk management. Finally, the Audit Committee adopts guide lines for
transactions with companies and persons closely associated with Volvo.
Composition and work in 2014
At the statutory Board meeting following the Annual General Meeting
2014, the following Board members were appointed members of the
Audit Committee:
• Lars Westerberg,
• Jean-Baptiste Duzan,
• Hanne de Mora
Lars Westerberg was appointed Chairman of the Audit Committee.
According to the Swedish Companies Act, the members of the Audit
Committee may not be employees of the company and at least one mem-
ber of the Audit Committee shall be independent and have accounting or
auditing expertise. In addition, the Code stipulates that a majority of the
members of the Audit Committee shall be independent of the company
and the company management, and that at least one of the members who
is independent of the company and the company management shall also
be independent of the company’s major shareholders. The Election Com-
mittee’s assessment of independence prior to the Annual General Meet-
ing 2014 is presented above under the “Independence requirements”
section on page 96. All members of the Audit Committee are highly famil-
iar with accounting matters and the accounting standards that apply for
an international Group such as the Volvo Group.
The Audit Committee met with the external auditors without the presence
of management at four occasions during 2014 in connection with the Audit
Committee meetings. The Audit Committee has also met with the Head of
Corporate Audit at the meetings of the Audit Committee.
The Audit Committee and the external auditors have, among other tasks,
discussed the external audit plan and risk management. The Audit Commit-
tee held 10 regular meetings during 2014. The attendance of Board Mem-
bers at Committee meetings is presented in the table on page 99.
6 Remuneration Committee
Duties
In April 2003, the Board established a Remuneration Committee for the
purpose of preparing and deciding on issues relating to remuneration to
senior executives in the Group. The duties of the Committee include pre-
senting recommendations for resolution by the Board regarding the terms
and conditions of employment and remuneration for the President of AB
Volvo, principles for remuneration, including pensions and severance pay-
ments, for other members of the Group Executive Team, and principles for
variable salary systems, share-based incentive programs, pensions and
severance payment for other senior executives in the Group.
The Remuneration Committee shall monitor and evaluate ongoing pro-
grams and programs concluded during the year covering variable remu-
neration for the executives, application of the policy for remuneration to
senior executives on which the Annual General Meeting shall decide and
the current remuneration structures and levels in the Group. The Board
shall, not later than two weeks prior to the Annual General Meeting, sub-
mit a report on the results of the Remuneration Committee’s evaluation on
the company’s website.
Composition and work in 2014
At the statutory Board meeting following the Annual General Meeting
2014, the following Board members were appointed members of the
Remuneration Committee:
• Carl-Henric Svanberg,
• James W. Griffi th,
• Anders Nyrén
Carl-Henric Svanberg was appointed Chairman of the Remuneration
Committee.
The Code sets the requirement that members of the Remuneration Com-
mittee, with the exception of the Board Chairman if being a member of the
Remuneration Committee, shall be independent of the company and the
company management. The Election committee’s assessment of inde-
pendence prior to the Annual General Meeting 2014 is presented under
the “Independence requirements” section on page 96.
The Remuneration Committee held four meetings during 2014. The
attendance of Board Members at Committee meetings is presented in the
table on page 99.
Remuneration to Board members
The Annual General Meeting resolves on fees to be paid to the Board
Members elected by the shareholders. The Annual General Meeting held
on April 2, 2014, approved fee payments to the Board for the time until the
end of the next Annual General Meeting, as follows.
Volvo’s Chairman should receive a fee of SEK 3,250,000 and each of
the remaining Members elected by the shareholders should receive a fee
of SEK 950,000 with the exception of the President. The Chairman of the
Audit Committee should receive SEK 300,000 and other members of the
Audit Committee SEK 150,000 each. In addition, the Chairman of the
Remuneration Committee should receive SEK 125,000 and other mem-
bers of the Remuneration Committee SEK 100,000 each.
Board of Directors >>
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CORPORATE GOVERNANCE REPORT 2014 CORPORATE GOVERNANCE